Chinese bank offers to fund Israeli solar energy projects

The China Development Bank is offering to finance mid-sized and large projects of 1-50 megawatts

The China Development Bank is offering to finance Israeli solar energy projects, the first time that a foreign bank has expressed an interest in the sector. The bank is offering to finance mid-sized and large projects of 1-50 megawatts.

The government-owned China Development Bank is one of the world's top 50 banks, and received an Aa3 rating by Moody's in May 2011. Its financing could help struggling ventures to secure financing, which is a condition for obtaining an electricity production license. The Public Utilities Authority (Electricity) requires a venture to sign a financing agreement within 90 days of receiving a rates commitment, and a venture that fails to meet this condition risks losing its electricity production quota.

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As a condition for financing, the China Development Bank requires the venture to buy solar panels from Chinese manufacturers ET Solar, or for the company to build the project.

ET Solar's Israel manager Rafi Kirshenboim said that the Chinese solution aims to counter fears of Israeli banks about the set-up risks of solar energy projects. After a solar energy venture is hooked up to the national grid, it can refinance the loans with an Israeli bank.